District Court (Tenn.) Finds No Supplemental Jurisdiction over Auto Finance Company’s Counter-Claim for the Debt in TCPA Case

In Ramsey v. General Motors Financial Co., Inc., 2015 WL 6396000, at *1-2 (M.D.Tenn.,2015), Judge Campbell dismissed the Defendant’s counterclaim for the debt in a TCPA action.

Similarly, Plaintiff contends that Defendant’s state law claim can be resolved without any consideration of whether Defendant violated the TCPA. The determination of whether Plaintiff was in default under the Contract in no way depends upon whether Defendant violated the TCPA in attempting to collect on that debt. See Salei v. Boardwalk Regency Corp., 913 F.Supp. 993, 999 (E.D.Mich.1996).  Defendant argues that Edwards v. Equitable Acceptance Corp. requires a different result. In that case, as here, the plaintiff sued for violations of the TCPA based upon the defendant’s attempts to collect a debt. The defendant counter-sued for breach of contract and unjust enrichment, based upon the plaintiff’s alleged default. The court in Edwards concluded that the counterclaim on the underlying debt formed part of the same case or controversy as the TCPA claim, holding that the common factual connection between the claims was the underlying debt. Edwards, 2015 WL3607297 at * 3 (N.D. Ohio June 8, 2015).  Here, the Court finds that Defendant’s Counter-complaint does not arise from the same case or controversy as Plaintiff’s TCPA claim. Although Plaintiff’s claim, from a broad perspective, arose from the underlying debt upon which Defendant sues, a closer look reveals that the operative facts from which Plaintiff’s federal claim arose are separate and different from the operative facts from which Defendant’s state law claim arose. The proof needed to establish Defendant’s violation of the TCPA (e.g., calls made, without express consent, with an automatic telephone dialing system or an artificial or prerecorded voice) is different from the proof needed to establish Plaintiff’s breach of the Contract (e.g., existence of a valid contract, default, damages).  The Court finds this case to be more like Salei. In Salei, the court stated that, although the entire relationship between the parties consisted of the defendant’s attempts to collect on the plaintiff’s debt, the state and federal claims did not share the same “operative” facts. Salei. 913 F.Supp. at 998–99. The facts that were relevant to the plaintiff’s Fair Credit Reporting Act claim were completely separate and distinct from the facts which were relevant to the plaintiff’s state law claim for breach of a settlement agreement. Id. at 999.